Question

Uber has had phenomenal growth, going from four people in 2009 to the two kinds of workers it deals with today: (1) 12,000 full-time nondriver employees, such as those working in its San Francisco headquarters, and (2) about 2 million active drivers globally, the independent contractors it calls “partners.”

Uber’s Employees

Former CEO Travis Kalanick viewed human resources (HR) as having one function—recruiting. Other HR functions were not a priority for Uber. For example, the company had fewer than 10 HR representatives in 2016 who were responsible for training managers and handling issues such as sexual harassment for the 6,000 employees it had at the time. “When HR becomes solely a talent race, boards and CEOs can miss the less obvious but equally vital value of managing both new hires and leaders who are facing increasing demands,” says John Boudreau in a Harvard Business Review article.

Kalanick’s lack of focus on HR created a toxic atmosphere at the organization. Much of this became evident with Susan Fowler, a former Uber engineer. Fowler claimed in a February 2017 blog that she was sexually harassed by her supervisor and that HR ignored her claims. Other employees have since reported that a premium was placed on workers who delivered strong performance and aggressive growth, and that their inappropriate workplace behavior was overlooked, according to the New York Times.

Uber attempted to improve this situation by focusing on the accuracy of its performance evaluations. In the past, performance reviews were subjective with managers simply meeting behind closed doors and rating their employees. This obviously increased the potential for managerial bias. The process also was deficient in that employees did not have individual goals to be evaluated against, making it hard to hold employees and managers accountable for objective results.

Uber implemented two significant changes in 2017 to overcome problems with its appraisal system. First, the company established measurable goals for all employees, and they were transparent for all to see. Second, Uber implemented something similar to a 360-degree performance appraisal system as evaluations needed to take into account more than a manager’s direct observation of subordinates. The system consisted of committees reviewing employees’ self-evaluations, peer evaluations, and manager evaluations to make sure bonuses were given out fairly, according to Uber Chief People Officer Liane Hornsey.

While these changes may have improved the human resource process at Uber, employee issues still persist. For example, HR Chief Hornsey resigned in July 2018 amid continuing employee dissatisfaction. “Disgruntled employees still don’t trust Uber’s systems, and they are turning to the media to air their grievances. This suggests that Khosrowshahi’s attempt to build trust among employees, an assurance that the company can address challenges internally, has not taken hold,” says Wired Magazine.

Uber’s Drivers

Uber isn’t only failing its employees; it’s also failing its drivers. The company seems to offer very little in human resource development for its contractors. Drivers are given the option of watching a 13-minute training video covering such topics as how to provide good service and get five-star ratings from customers. “The only safety thing they tell us,” says one driver, “is to have a hands-free phone holder and to keep your eyes on the road.” Drivers who want additional training will have to pay for it on their own. Uber has contracted with 7x7 Experience to offer quality improvement courses at a rate of $49 per course. They can also take a course on “Tip Maximization” for another $29.

Uber drivers may not be happy about having to pay for quality improvement courses, especially because a recent study found they aren’t making that much. The Economic Policy Institute released a 2018 analysis showing that Uber drivers take home around $9.21 an hour. This means drivers are making less than the minimum wage of some of Uber’s biggest markets, such as Chicago, Los Angeles, and New York. The $9.21 figure actually “puts Uber drivers at the bottom 10 percent of wage earners” according to the Chicago Tribune.

Drivers, often undertrained, are also victims of an automated performance appraisal system in which passengers rate drivers on a scale of from 1 to 5 stars. Each driver then receives a weekly average rating for all passengers, and this average is used to make personnel decisions. In Atlanta, for example, a driver receiving less than 4.6 stars may be kicked out of the program. Uber did update its ratings system in July 2017 by introducing a “ratings protection” initiative. This system was designed to protect drivers from complaints that are unrelated to their actual performance. For example, when a rider selects a rating below 5 stars, a screen will pop up asking “what could be improved?” Options include “route by Uber” and “co-rider,” and only one option goes back to the driver.

Uber drivers may not have much power to fight back against the company’s HR policies. The company is resisting unionization because it wants its app-based drivers to be “business partners”—that is, contractors not subject to employee-protection laws. The issue of unionization is being fought in the courts. In 2015, Seattle passed an ordinance allowing Uber (and Lyft) drivers to unionize, which the U.S. Chamber of Commerce and Uber have sought to overturn. In May 2018, the Ninth Circuit Court of Appeals reversed a lower court’s 2017 decision to uphold the law, continuing the legal saga by sending the case back to the lower court for further review.

Uber has worked to improve and safeguard its driver performance appraisal rating system, yet it still lacks some of the basic components of traditional employee performance management systems. Based on the case, which of the following is not part of Uber’s performance appraisal system for drivers?

A: Rewards

B: Feedback

C: Expectations

D: Monitoring

E: Punishment

Answer 1

Uber performance appraisal system for drivers have all of it.

A-Rewards-This can be justified by New York Times article in the question saying " premium was placed on workers who delivered strong performance and aggressive growth".

B-Feedback-This can be justified by the statement in the question "automated performance appraisal system in which passengers rate drivers on a scale of from 1 to 5 stars. Each driver then receives a weekly average rating for all passengers, and this average is used to make personnel decisions"

C-Expectations-This can be justified by the following statement in the question "the company established measurable goals for all employees, and they were transparent for all to see."

D-Monitoring-Implementation of  something similar to a 360-degree performance appraisal system.

E-Punishment- Example, In Atlanta a driver receiving less than 4.6 stars may be kicked out of the program.